Management Resource Solutions Regulatory News (MRS)

3 Apr 2007 07:00

Melrose Resources PLC03 April 2007 Immediate Release 3 April 2007 MELROSE RESOURCES PLC ("Melrose" or "the Company") Drilling update Melrose Resources plc (LSE:MRS), the exploration and production company withassets in Bulgaria, Egypt, France and the United States, today provides anupdate on its exploration, appraisal and development wells which are drilling inBulgaria and Egypt. In Bulgaria, the Izgrev No.1 exploration well was spudded on 16 March 2007 andreached total depth at 1,800m on 27 March. High gas shows were reported whiledrilling over an extensive interval from 1,115m to 1,250m. Wireline logsindicate the presence of several gas bearing intervals between 1,150m and 1,225mwithin a high porosity diatomite shale. This reservoir, although normally of lowpermeability, has been drilled within a fault zone and may be naturallyfractured enough to allow gas to flow at the Izgrev well location. Additionalinformation will be acquired in order to assess the commerciality of thereservoir through further logging and a formation flow test. In Egypt, the West Khilala No.6 appraisal well was drilled in order to establishthe down-dip limits of the field on the western flank. The well achieved itsobjective by extending the known limits of the reservoir beyond the mapped areaof high seismic amplitude. The well intersected a 39ft gross pay interval ininterbedded sands and shales between 10,012ft and 10,051ft with 16ft attributedto net pay. The top reservoir was intersected slightly lower than prognosed. Thewell results are likely to provide an increase in proven reserves and allow asubstantiation of the total reserves which are not expected to increase. The West Khilala No.6 has now been sidetracked to a location 30ft updip of theoriginal well. This well, West Khilala No. 6 ST, is currently being logged andinitial results indicate a gross pay interval of 69ft with a high net to grossratio. Following the completion of this well the rig will move to the WestKhilala No. 5 development location in the north-west part of the field. The West Dikirnis No.3 development well successfully intersected a 40ft grossoil column with 37.4ft of net pay in the Qawasim formation between 8,355ft and8,395ft. The well was drilled in the central part of the field as an oilproducer and will be flow tested later this week. The rig will remain on theWest Dikirnis No.3 surface location to drill a deviated appraisal well, WestDikirnis No.6, towards the southern limits of the field. Commenting on this, Robert Adair, Executive Chairman, said: "The news from the Izgrev well is further confirmation of the presence of activehydrocarbon systems in our Bulgarian acreage. It is not yet clear, however,whether Izgrev will provide us with commercial reserves. A further announcementwill be made in due course when we have gathered and collated all of the testresults and analysed the data. In Egypt, while the information from West Khilala No.6 does not increase totalreserves it is expected to increase proved reserves. The West Khilala No.6 STshould also provide us with surplus production capacity in the field. The resultof West Dikirnis No.3 is important in increasing field productive capacity inthe West Dikirnis Field towards our target of 10,000 bopd. Development of WestDikirnis is progressing well with first production scheduled before the end ofthe third quarter." For further information please contact: Melrose Resources plc 0184 553 7037Robert Adair, Executive Chairman 0131 221 3360Munro Sutherland, Finance Director Buchanan Communications 0207 466 5000Ben WilleyEric Burns or visit www.melroseresources.com This information is provided by RNS The company news service from the London Stock Exchange